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Fitch's BAAC ratings reflect strong state support

Fitch Ratings (Thailand) has assigned the Bank for Agriculture and Agricultural Cooperatives national long- and short-term ratings of "AAA(tha)" with a "stable" outlook and "F1+(tha)" respectively.

The ratings reflect Fitch's view that there is a high probability that the state will provide extraordinary support on a timely basis, if necessary.

This is based on BAAC's strong links to the government given its nearly full state ownership, legal status as a state policy bank set up under a specific law, proven history of financial support, and close state control.

The ratings also reflect BAAC's unique role in providing support to government policies relating to the agricultural sector and rural development.

The "stable" outlook reflects Fitch's expectations that the government's propensity to support the bank is unlikely to change in the medium term.

The ratings are unlikely to be affected by any change in Thailand's issuer default ratings, because the sovereign would still have the lowest default risk within the country.

Any perceived weakening in the sovereign's propensity to support BAAC, for example through a legal amendment or an ownership change, may result in a downgrade of its national ratings.

However, Fitch believes this is unlikely in the medium term in light of the bank's policy roles.

AAV posts H1 loss

Asia Aviation, a major shareholder of Thai AirAsia, has announced revenue of Bt5.46 billion in the first half - an increase of 2 per cent year on year. But because of a 21-per-cent increase in expenditure, AAV ended the period with a loss of Bt318 million, chief executive officer Tassapon Bijleveld said.

Thai AirAsia posted revenue of Bt11.92 billion in the first six months, up 5 per cent from the same period last year, for a net loss of Bt73 million.

AAV's net loss in the second quarter was Bt176 million and Bt37 million in the first half.

Tassapon said Thai AirAsia would offer more promotions in the current second half because of the improved political situation. He said that would include cooperation with the Tourism Authority of Thailand and private companies in a campaign called "Thailand Shopping Paradise".

The scheme aims to entice foreigners to the Kingdom through roadshows in China and Indochina, where demand remains high.

Tassapon said there would also be more press events, while the Fly Thru service, a convenient option for people in Myanmar and Vietnam, should also increase the number of visitors to Thailand.

Yamaha income surges

Yamaha Motor Co announced that its consolidated operating income in the first half of the year surged 62.4 per cent compared with the same period last year, to 49.1 billion yen (Bt14.4 billion).

The company has forecast operating income of at least 80 billion yen for the year - a year earlier than the target in its 2013-15 business plan.

Net sales rose 7.6 per cent to 756 billion yen, with increases recorded in all business segments of the company. Ordinary income surged 60.6 per cent to 49.1 billion yen and net income rose a brisk 57.6 per cent to 32.2 billion yen.

The large jump in operating income reflects strong sales of motorcycles and marine products in developed markets.

Large-model marine products have sold especially well and motorcycle sales have been better than expected.


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